LOS CABOS, Mexico (AP) - President Barack
Obama, closing his final foreign trip before the November election,
sought to head home with fresh commitments Tuesday that Europe was
racing toward a plan to keep its economic union afloat and its allies
from being sucked into recession.
Leaders of the world's
other established and emerging powers wanted something from Obama, too -
an assurance that the U.S. economy won't plunge into an abyss at year's
end, when tax hikes and big spending cuts are due to kick in unless
lawmakers and the White House cut a deal.
All sides at the Group of
20 summit seemed intent on sending confident signals to jittery markets
and unhappy electorates. The European mess of high debt, high borrowing
rates and high unemployment poses huge spillover risks to the American
economy and Obama's political future.
Underscoring the stakes,
Obama broke from the main summit Tuesday for a brief meeting with
leaders from Britain, Germany, Italy, France, Spain and the European
Union.
Obama also met privately
Monday with German Chancellor Angela Merkel. Following their talks, he
sent word through a spokesman that he was "encouraged" about Europe's
path. Merkel proclaimed that the European Union nations were determined
to solve the crisis through debt cutting, growth and cooperation.
"That reached very
attentive ears here," Merkel said from the summit, held in this resort
region along the Pacific coast of Mexico.
Obama was immersed in a
second day of summit talks before meeting separately with Chinese
President Hu Jintao and holding a news conference. He was to be back in
Washington early Wednesday, where a fierce re-election campaign and a
slumping U.S. jobs market await him.
Despite the words of unity,
European leaders showed signs that they have heard enough about their
troubles, particularly from Americans. Memories linger of the 2008
financial crash that was borne in the United States and destroyed jobs
and wealth.
"The eurozone has a serious
problem, but it is certainly not the only imbalance in the world
economy," Italian Prime Minster Mario Monti said Tuesday. He said the
United States' own financial problems were mentioned in G-20 talks "by
almost everybody, including President Obama."
European Commission
President Jose Manuel Barroso took an aggressive tone with reporters on
Monday, also pointing some blame at North America and saying "Frankly we
are not coming here to receive lessons in terms of democracy."
Europe's ability to turn
around its fortunes fast will have direct bearing on whether Obama wins a
second term. The bigger the drag from abroad, the harder the job growth
in the United States.
Obama said all countries must contribute so "the economy grows, the situation stabilizes, confidence returns to the markets."
Although the foreign
gatherings allow Obama to show off statesmanship, every day spent away
from the United States and a direct focus on jobs in America quietly
gives headaches to his campaign aides.
While Obama was in Mexico,
his Republican competitor, Mitt Romney, was wrapping up a campaign bus
tour through the heart of America.
Obama was spending much of
Tuesday on the economic crisis after taking care of some unrelated
diplomatic business - his first meeting with Vladimir Putin since the
former Russian president returned to the job this year. The leaders met
for two hours Monday, in talks dominated by a bloody Syrian conflict
that has deeply divided Russia and the U.S.
Central to the G-20 debate
is how nations can boost jobs and consumer demand without sinking deeper
into debt. Obama has implored governments to spend and grow, not just
cut.
A draft of the leaders'
final statement shows they want assurances that the United States won't
take a deep plunge and drag them down as well.
The statement says the U.S.
will "calibrate" its attempt to rein in debt and spending "by avoiding a
sharp fiscal contraction in 2013."
That's a reference to a big
threat to economic growth in the United States after the November
election: the expiration of George W. Bush-era tax cuts and a scheduled
round of automatic spending cuts that could send the nation back into a
recession.
While the White House and
lawmakers agree that they must act late this year or early next year to
avoid such a "fiscal cliff," there is no path yet on how to avoid it.
Obama's political move has
been to constantly show confidence in Europe's ability to solve its
problems, but prod its leaders to move and chide them for not doing more
sooner. Now, White House aides talk more positively about the direction
of the debate, as they see it, toward the role of government in
spurring economic growth.
"I think if you look at the
shift in the focus, you'll see a very strong focus on supporting demand
... recognizing that economic conditions have deteriorated," said Lael
Brainard, the Treasury Department's undersecretary for international
affairs.
"This is very important to the Europeans in particular," she said. "And yes, we have heard it from German colleagues."
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